How to Buy Cars Directly From Insurance Companies in 2024
You can buy cars directly from the insurance company through auto auctions that sell totaled vehicles. Insurers are usually hesitant to fully insure rebuilt cars, as they may not be as safe. Although guidelines vary by state, liability coverage is mandatory. Liability coverage averages around $43.03/mo in the U.S. Be aware that these vehicles will normally need a salvage title, which has its own complications. Compare auto insurance rates on cars bought at auction now.
Read moreFree Car Insurance Comparison
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Jeffrey Manola
Licensed Insurance Agent
Jeffrey Manola is an experienced insurance agent who founded TopQuoteLifeInsurance.com and NoMedicalExamQuotes.com. His mission when creating these sites was to provide online consumers searching for insurance with the most affordable rates available. Not only does he strive to provide consumers with the best prices for insurance coverage, but he also wants those on the market for insurance to ...
Licensed Insurance Agent
UPDATED: Apr 15, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Apr 15, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Auto insurance companies may deem a vehicle a total loss if the cost of repair is around 80 percent of its total value.
- Insurers will typically take possession of a totaled vehicle and sell it at auction.
- Rebuilt-titled vehicles that have been repaired are usually worth less money, very difficult to insure with full coverage, and won’t be worth much at resale.
- Re-titling a salvaged vehicle with a “clean title” is considered to be fraud.
If you know how to buy cars directly from the insurance company, you can save a lot of money. It might be a great idea, as some vehicles aren’t drastically damaged but simply cost too much to repair compared to the remaining value of the car.
Be aware that these vehicles will normally need a salvage title, which has its own complications. You may be unable to get a car loan. Auto insurance for salvaged vehicles may cost more than a typical car, but insurers will often only allow you to purchase liability-only coverage for salvaged cars.
If you’re looking for cheap insurance for auction cars, we can help. Before learning more about how you buy cars directly from the insurance company, enter your ZIP code above to get free quotes from multiple insurers.
How to Buy Damaged Cars Direct From Insurance Companies
How do you buy salvage cars directly from insurance companies?
When a car is involved in an automobile accident, it might be too damaged to repair. These accident damaged cars for sale are determined to be a total loss. NOLO reports that most states estimate a total loss occurs when the cost of repair is 80 percent of the estimated value or if the vehicle is deemed unsafe to repair.
But can you buy cars from insurance companies and what do insurance companies do with totaled cars? Auto insurance companies don’t usually sell these totaled cars themselves at insurance auto auctions. If you’re wondering how to buy salvage cars, they instead sell them via auto auctions.
How do you buy cars at wholesale auctions? These are generally the same auto auctions who sell impounded, abandoned, or repossessed vehicles. There are even many online options, making the process even simpler.
These insurance salvage cars for sale are frequently sold at auctions hosted by companies like Auto Auction Mall, Copart, Dashub, and IAAI.
The following video from Auto Auction Rebuilds discusses how you can bid on Copart, for instance.
If you’re wondering how you can buy cars at auction without a license, these are some options.
You can even find places that allow you to buy salvage cars without bidding thanks to a “buy it now” option such as those on IAA – Insurance Auto Auction. Others offer live car auctions.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Auto Insurance for Salvage Vehicles
Salvage vehicles are more difficult to insure. Since the structural integrity may have been compromised, these cars are considered to be less safe and may buckle under less pressure than a new vehicle.
If my insurance totals my car, can I keep it? Possibly, if you wanted to repair it yourself. They deduct the amount they estimate they’d receive from selling it at auction. Though it would save money in the long run, that’s going to make it difficult to get comprehensive and collision coverage to cover your own vehicle.
Although guidelines vary by state, liability coverage is mandatory. The table below shows the average liability auto insurance rates by state in the U.S.
Average Annual Liability Auto Insurance Rates by State
States | Average Annual Rates |
---|---|
North Dakota | $282.55 |
South Dakota | $289.04 |
Iowa | $293.34 |
Wyoming | $323.38 |
Maine | $333.92 |
Idaho | $337.17 |
Vermont | $340.98 |
Kansas | $342.33 |
Nebraska | $349.07 |
North Carolina | $357.59 |
Wisconsin | $359.84 |
Indiana | $372.44 |
Alabama | $372.57 |
Ohio | $376.16 |
Arkansas | $381.14 |
Montana | $387.77 |
New Hampshire | $393.24 |
Tennessee | $397.73 |
Missouri | $399.41 |
Virginia | $413.12 |
Illinois | $430.54 |
Mississippi | $437.38 |
Minnesota | $439.58 |
Oklahoma | $441.57 |
Hawaii | $458.49 |
New Mexico | $462.21 |
California | $462.95 |
Utah | $471.26 |
Colorado | $477.10 |
Arizona | $488.59 |
Georgia | $490.64 |
Pennsylvania | $495.02 |
South Carolina | $497.50 |
Texas | $498.44 |
West Virginia | $501.44 |
Kentucky | $518.91 |
Alaska | $547.34 |
Oregon | $553.43 |
Washington | $568.92 |
Massachusetts | $587.75 |
Maryland | $599.48 |
District of Columbia | $628.09 |
Connecticut | $633.95 |
Nevada | $647.07 |
Rhode Island | $720.06 |
Michigan | $722.04 |
Louisiana | $727.15 |
Delaware | $776.50 |
New York | $784.98 |
Florida | $845.05 |
New Jersey | $865.55 |
The insurance that would typically cover your own vehicle includes comprehensive and collision. But if insurers refuse to sell that to you out of concerns for the integrity of the vehicle, it’s also likely you won’t be able to get a loan to buy it.
This is largely due to the fact that lenders usually require full coverage of the car while you’re paying back the loan to protect their assets. If you can’t get full coverage auto insurance, you probably won’t get the loan.
When is a vehicle considered salvage?
There is a difference between salvaged and totaled vehicles. You may hear them used interchangeably, but they’re not quite the same. Typically, salvaged vehicles were once considered totaled in an accident, but not all totaled vehicles are salvaged.
Salvaged cars are typically those which have been repaired after great damage. This damage could come from various things, such as:
- Car accident involving a collision with another vehicle or object
- Flood damage
- Fire damage
- Heavy vandalism
- Hail damage
- Recovered stolen vehicle
The table below shows the difference between clean, salvage, and rebuilt titles.
Details of Vehicle Titles by Title Type
Title Type | Color of Title | Issuing Factors | Pros | Cons |
---|---|---|---|---|
Clean title | Green | Issued for new or used vehicles with little to no damage | No damage or repairs to deal with | Most expensive upfront cost |
Salvage title | Blue | Issued for vehicles whose damages exceed the value of the vehicle | Usually very cheap to purchase | No insurance available, can't be driven legally, and repairs can be costly |
Rebuilt title | Orange | Issued for vehicles that were salvaged but have been repaired and passed an inspection | Cheaper than a new or used car to purchase | Can be driven legally but can be hard to find more than liability insurance |
Essentially, once a vehicle is totaled out, it might be rebuilt or repaired to an operable state. Once it’s considered safe to operate, it can be re-titled as a salvage car.
This video from Donut Media further explains salvage titles.
The value of the vehicle changes, too. The industry typically estimates that salvage vehicles have 20 to 40 percent of their Kelley Blue Book value deducted.
Title Washing For Salvaged Vehicles
The salvage industry has led to an illegal practice known as “title washing.” CarFax discusses title washing as fraudulently changing a title’s status so that the history of the car is wiped out. This can lead to previously totaled-out cars being given a clean title.
This is important, as totaled cars might be less structurally sound as a result of its history. If it was involved in a crash and rebuilt, some parts may not be as strong as they once were.
The National Motor Vehicle Title Information System tracks five factors on a vehicle in an effort to reduce “title washing.” These are the five factors:
- The current state of the title and title’s last date.
- The brand history.
- The odometer reading of the vehicle.
- The totaled out loss history.
- The salvage history.
This data can be used to help prevent “title washing” of 57,000 vehicles every year, according to GovInfo.
If you’ve been looking into how to buy salvage cars direct from insurance companies, whether in the UK or U.S., you’ll still need auto insurance coverage.
Now that you know more about how to buy cars directly from an insurance company, enter your ZIP code below to get free quotes from multiple insurers.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Frequently Asked Questions
Can I buy a car directly from an insurance company?
Yes, it is possible to purchase a car directly from an insurance company. When insurance companies declare a vehicle as a total loss due to damage or theft, they often take ownership of the vehicle. These cars are then sold through various channels, including auctions, online platforms, or directly from the insurance company.
What are the advantages of buying a car from an insurance company?
- Potential savings: Cars sold by insurance companies are often priced below market value, as the insurance company’s goal is to recover some of the costs they incurred from the claim.
- Transparent history: Insurance companies typically provide detailed information about the car’s accident history, repairs, and any previous claims, enabling buyers to make informed decisions.
- Wide selection: Insurance companies handle a variety of vehicles, ranging from slightly damaged to completely totaled, which may offer a broader range of options for buyers.
Are there any downsides to buying a car directly from an insurance company?
- Limited warranty: Unlike purchasing a new car or a certified pre-owned vehicle from a dealership, cars bought from insurance companies generally do not come with a warranty.
- No test drive: Depending on the insurance company’s policies, it may not be possible to test drive the vehicle before purchasing it. Buyers must rely on the provided information and any available inspection reports.
- Potential damage and repair issues: While insurance companies disclose the car’s history, it’s essential for buyers to thoroughly inspect the vehicle or hire a professional inspector to identify any hidden damages or repair issues.
How can I buy a car directly from an insurance company?
There are a few ways to purchase a car directly from an insurance company:
- Auctions: Many insurance companies sell their vehicles through public or online auctions. Interested buyers can participate in these auctions to bid on the cars they desire.
- Online platforms: Some insurance companies have online platforms or partnerships with specific websites where they list their cars for sale. Buyers can browse through the available inventory, contact the insurance company, and negotiate a price.
- Contacting the insurance company: In certain cases, insurance companies may sell vehicles directly to interested buyers who contact them directly. It’s advisable to inquire with the insurance company’s claims or salvage department to check if they have any available vehicles for sale.
Are there any risks involved in buying a car directly from an insurance company?
Yes, there are some risks associated with purchasing a car directly from an insurance company. These include:
- Unknown condition: While insurance companies typically provide information about the car’s history, there is still a possibility of undisclosed issues or damages that may only become apparent after the purchase.
- Limited recourse: Unlike buying from a dealership, where you may have more options for recourse or warranties, purchasing directly from an insurance company may offer limited protection or avenues for resolving disputes.
- Salvage or rebuilt title: Some cars sold by insurance companies may have a salvage or rebuilt title, indicating that they have been heavily damaged and repaired. These vehicles might have lower resale value or difficulty obtaining insurance coverage in the future.
- Limited selection: The inventory of cars available from insurance companies can be unpredictable and vary in terms of make, model, and condition. Finding a specific car may not always be possible.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
Secured with SHA-256 Encryption
Jeffrey Manola
Licensed Insurance Agent
Jeffrey Manola is an experienced insurance agent who founded TopQuoteLifeInsurance.com and NoMedicalExamQuotes.com. His mission when creating these sites was to provide online consumers searching for insurance with the most affordable rates available. Not only does he strive to provide consumers with the best prices for insurance coverage, but he also wants those on the market for insurance to ...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.